Jobs Report Better Than Feared

by Jeremy J. Siegel of WisdomTree, Inc., 7/9/25

The headline employment figure came in stronger than expected and better than feared following the weak ADP report, but the details were far from a blockbuster.

Private sector hiring came in light, and both average hours worked and wages showed restraint, offering no new inflationary pressures. Government hiring added 70,000 jobs, mostly state and local government. Meanwhile, the household employment survey added 200,000 jobs, but only after a staggering 800,000 drop in the prior month, so we remain down on a two-month basis. All in all, this report was “okay”—not strong enough to change the path of monetary policy and certainly not weak enough to force the Fed’s hand toward a cut this month.

The bond markets were clearly positioned for a weaker report, which explains the 10 basis point spike in the 10-Year yield after the data hit. Even so, yields remain well below 4.5%, and the yield curve is still either flat or inverted. That’s consistent with the sluggish money supply growth we continue to see. In fact, very recent deposit data was especially weak. There is no evidence whatsoever of reaccelerating inflationary pressure from the monetary side, which remains one of the most important metrics I monitor. The Fed should be paying more attention to this weakness, but the optics of a 4.1% unemployment rate—improving relative to expectations—make it difficult in their minds to justify a cut in July. With no more employment reports before the July 30th FOMC meeting, and inflation readings unlikely to show a sharp deterioration, the Fed will keep rates steady for now.

Equity markets found encouragement, not because employment showed strength, but because it did not show further deterioration. The S&P 500 rose, and while higher yields tempered gains, the broad takeaway was that economic activity is holding up.